Month: December 2022

International Legal Issues for Startup E-Commerce Businesses

My law firm represents a fairly substantial number of companies that sell product worldwide over the Internet. This work has given us considerable insight into the legal issues international e-commerce companies often face, and since one of our international e-commerce lawyers recently wrote a client memo analyzing the key legal issues this particular company will face as it ramps up its international business over the Internet, I figured I might as well pull the highlights from that memo and set them out here.

The following is a list of the basic law related questions we typically grapple with when assisting companies that are starting to sell internationally over the internet.

1. What type of legal entity(ies) are you going to want? Where will you want them? These two questions must be answered in tandem.

2. From what countries will you accept purchases? Are you going to accept purchases from every

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Conflicting Terms of Service Provisions Undermine Arbitration Clause-Suski v. Coinbase

Coinbase launched “Dogecoin promotion” sweepstakes in 2021. Users sued Coinbase and its marketing agency, asserting claims under state law.

Coinbase sought to send the case to arbitration, but there was a possible conflict in the governing TOSes. Coinbase’s standard terms required consumers to arbitrate their disputes with Coinbase. However, the terms accompanying the Dogecoin sweepstakes offer contained an exclusive forum selection clause, requiring resolution of disputes in California courts. The legal question is how these two documents interact with each other. Does the original TOS (and its arbitration provision) control, or do the Dogecoin promotion terms?

The district court denied Coinbase’s request to compel arbitration. The Ninth Circuit affirms.

Coinbase argued that the delegation clause in its standard Coinbase terms granted authority to the arbitrator in the first instance to decide whether the dispute was covered by the arbitration clause. The Ninth Circuit disagreed, finding that while this may be

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China Internal Company Frauds – Harris Bricken Sliwoski LLP

Most of what we write about frauds involving China are about frauds perpetrated by Chinese companies against foreign companies. But as a reader recently emailed me, frauds perpetrated within foreign companies in China “are at least as common and every bit as damaging.”

I agree, and today’s post highlights six of the most common internal company frauds our China lawyers see.

Before I talk about internal company fraud, I want to quote a long-time client and friend on how to deal with these. This person is from Europe but his “business empire” extends pretty much around the world and it includes some extremely difficult places in which to do business — places that make China look like a piece of cake. Once when I told him I was convinced people in one of his businesses (in a country usually prefaced with the words “war-torn”) were skimming fairly large amounts from

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China Contracts. Jurisdiction, Language and Choice of Law

I love when blog posts come pre-written. In cleaning out old emails today I found one from one of my law firm’s international dispute resolution lawyers to a Canadian client’s in-house lawyer who had proposed writing a contract that would give the client the choice of suing its Chinese counter-party in either Canada or China.

In response, our international litigator explained why this jurisdiction provision sounds good in theory but is too risky in practice for China contracts, along with. a short dissertation on the factors that typically go into choosing jurisdiction, choice of law, and official language in China contracts:

On jurisdiction, our China lawyers used to advocate for what you suggest.

However, after Chinese courts started ruling that this sort of split jurisdiction provision means there is no jurisdiction in China, we stopped doing that. If you want jurisdiction in China, the agreement should be 1) governed

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Ranking Creditors: Chinese Companies are Dead Last.

I recently had a brief phone conversation with a long term client. This client had called me to discuss its difficulties in getting paid and its difficulties in making its payments. They wanted my help in figuring out how to deal with both those they owed and with those who owed them.

I suggested a Zoom meeting, to which they bring all documents relating to all those to which this company owed “substantial” money and to all those that owed this company substantial money. I have modified the facts a bit to disguise the specific company, but the substance is all there.

Nine companies owed my client amounts ranging from around $25,000 to $500,000. About half were in the US, half were in Asia. My client owed around 40 companies amounts ranging from around $1,000 to $100,000. About 75% of these debts were to Asian companies (mostly Chinese, Korean and

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